Market Overview

Acadia Realty Trust Reports First Quarter 2019 Operating Results

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Acadia Realty Trust (NYSE:AKR) ("Acadia" or the "Company") today
reported operating results for the quarter ended March 31, 2019. All per
share amounts are on a fully-diluted basis.

Acadia operates dual platforms, comprised of a high-quality core real
estate portfolio ("Core Portfolio"), through which the Company owns and
operates assets in the nation's most dynamic urban and street-retail
corridors, and a series of discretionary, institutional funds ("Funds")
that target opportunistic and value-add investments.

Please refer to the tables and notes accompanying this press release
for further details on operating results and additional disclosures
related to net income, funds from operations ("FFO") and net operating
income ("NOI").

Highlights

  • Earnings: Generated GAAP earnings per share of $0.15 and FFO
    per share of $0.39 for the first quarter
  • Core Portfolio Operating Results:

◦ Strong same-property net operating income growth of 4.6% for the first
quarter (excluding redevelopments)

◦ Continued leasing progress across the portfolio including the
execution of several key street leases at Lincoln Park Chicago along
with Madison Avenue in New York City

◦ Strong rent spreads of 26.9% and 8.3% on new leases for the quarter on
a GAAP and cash basis, respectively

◦ Reported 94.6% leased occupancy as of March 31, 2019

  • Core Acquisition Activity: During the first quarter, acquired,
    or entered into contracts to acquire a retail portfolio in Soho NYC
    for $96 million, of which $32 million has closed as of March 31, 2019
  • Fund Acquisition Activity: Fund V completed a $48.5 million
    acquisition during the first quarter
  • Balance Sheet: Maintained conservative leverage levels by
    match-funding closed acquisitions; raising gross proceeds during the
    first quarter of $28.2 million at an average price per share of
    approximately $29 through the Company's at-the-market ("ATM") program.
    At March 31, 2019, approximately 96% of Core debt was fixed at an
    average rate of 3.8% with a weighted-average maturity of 5.6 years

"I am pleased to report that 2019 is off to a strong start. This quarter
our Core Portfolio has again delivered strong growth," stated Kenneth F.
Bernstein, President and CEO of Acadia Realty Trust. "Importantly, we
are selectively adding high-quality street retail properties to our Core
Portfolio. We are also seeing an increase in compelling investment
opportunities in our fund business. Thus, by maintaining a healthy
balance sheet, with plenty of dry powder, along with strong internal
growth over the next several years, we are well positioned to create
meaningful value for the benefit of all of our stakeholders."

FINANCIAL RESULTS

A complete reconciliation, in dollars and per share amounts, of net
income attributable to common shareholders to FFO attributable to common
shareholders is included in the financial tables of this release.

Net Income

Net income attributable to common shareholders for the quarter ended
March 31, 2019 was $12.2 million, or $0.15 per share, including $5.8
million, or $0.07 per share, related to a previously-announced
accelerated tenant recapture. Net income attributable to common
shareholders for the quarter ended March 31, 2018 was $7.4 million, or
$0.09 per share.

FFO as Defined by NAREIT

FFO for the quarter ended March 31, 2019 was $34.7 million, or $0.39 per
share, including $5.8 million, or $0.07 per share related to a
previously-announced accelerated tenant recapture. FFO for the quarter
ended March 31, 2018 was $29.1 million, or $0.33 per share.

CORE PORTFOLIO

Core Operating Results

Driven by its street and urban portfolio, the Company had strong
same-property net operating income growth of 4.6% for the first quarter
(before redevelopments). This was driven by the profitable re-leasing of
key street and urban properties, contractual growth and better than
expected credit loss.

To date, the Company has executed several key leases including Parachute
Homes and Lively at Lincoln Park (Chicago) and Monica Vinader at Madison
Avenue (New York).

Driven primarily by the previously discussed expiration of H&M's lease
and successful re-tenanting to Uniqlo this quarter at State Street
(Chicago), the Core Portfolio was 93.3% occupied and 94.6% leased as of
March 31, 2019. The leased rate includes space that is leased but not
yet occupied and excludes development and redevelopment properties.

During the first quarter, the Company generated a 26.9% and 8.3%
increase in rent on a GAAP and cash basis, respectively, on two
conforming new leases aggregating approximately 4,000 square feet within
its street and urban portfolio.

Core Acquisitions

During the first quarter, the Company acquired, or entered into
contracts to acquire, a portfolio of six New York City street retail
assets for $96 million ("Soho Portfolio"), of which $32 million was
completed as of March 31, 2019. The Soho Portfolio consists of six
properties on Mercer and Greene Streets: two of the most dominant and
in-demand streets in the Soho submarket of Manhattan. These accretive
acquisitions are expected to provide strong contractual growth and
lease-up opportunities. During the quarter, the Company acquired 51 and
53 Greene Street. The properties are leased to Frame Denim and A.L.C.

The Company expects to complete the remaining portion of the Soho
Portfolio in phases through early 2020. No assurance can be given that
the Company will successfully close on the remaining acquisitions under
contract, which are subject to customary closing conditions.

Acquisitions completed to date were match-funded with equity raised
under the Company's ATM program at an average price per share of
approximately $29. The Company has sufficient liquidity through a
combination of anticipated proceeds from its structured finance
portfolio, capital recycling from its fund business and available
capacity on its lending facilities to fund the remaining acquisition.

FUND PLATFORM

Fund Acquisitions

The Company completed the following acquisition during the first quarter
2019:

Family Center at Riverdale, Riverdale, UT (Fund V). In March
2019, Fund V and its venture partner, CCA Acquisition Company, acquired
a 428,000-square foot shopping center, located in Riverdale, UT for
$48.5 million. This Target-anchored property is 97% leased.

Fund V has an acquisition pipeline with approximately $130.0 million of
investments subject to contracts and agreements in principle.

Fund Dispositions

The Company completed the following disposition during the first quarter
2019:

3104 M Street, Washington, DC (Fund III). In January, Fund III's
80%-owned venture sold its 3104 M Street property located in Washington,
DC for $10.5 million ($8.4 million at the Fund's share).

BALANCE SHEET

By match-funding its core acquisition activity, the Company has further
strengthened its already-solid, low-leveraged balance sheet. As
of March 31, 2019, the Company's net debt to EBITDA ratio for the Core
Portfolio was 5.2x, with approximately 96% of its Core Portfolio debt
fixed at an average rate of 3.8% with a weighted-average maturity of 5.6
years.

The Company raised gross proceeds of $28.2 million at an average price
per share of approximately $29 through the Company's ATM program during
the first quarter of 2019.

2019 GUIDANCE

The Company reaffirms its annual 2019 guidance of net income per share
of $0.35 to $0.46 and FFO per share of $1.34 to $1.46. In addition, the
Company reaffirms same property net operating income growth of 3.0% to
4.0% for 2019 (excluding redevelopments), which is comprised of 5% to 7%
growth within its street/urban portfolio and 0% to 1% within its
suburban portfolio.

Please refer to the Company's fourth quarter 2018 supplemental
information package for additional details regarding its
previously-announced 2019 guidance.

CONFERENCE CALL

Management will conduct a conference call on Thursday, April 25, 2019 at
12:00 PM ET to review the Company's earnings and operating results.
Dial-in and webcast information is listed below.

 

Live Conference Call:

Date: Thursday, April 25, 2019
Time: 12:00 PM ET
Dial#: 844-309-6711
Passcode: "Acadia Realty" or "6454798"
Webcast (Listen-only):

www.acadiarealty.com
under Investors, Presentations & Events

 

 

Phone Replay:

Dial#: 855-859-2056
Passcode: "6454798"
Available Through: Thursday, May 2, 2019
 

Webcast Replay:

www.acadiarealty.com
under Investors, Presentations & Events

 

About Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on
delivering long-term, profitable growth via its dual - Core and Fund -
operating platforms and its disciplined, location-driven investment
strategy. Acadia Realty Trust is accomplishing this goal by building a
best-in-class core real estate portfolio with meaningful concentrations
of assets in the nation's most dynamic urban and street-retail
corridors; making profitable opportunistic and value-add investments
through its series of discretionary, institutional funds; and
maintaining a strong balance sheet. For further information, please
visit www.acadiarealty.com.

Safe Harbor Statement

Certain matters in this press release may constitute forward-looking
statements within the meaning of federal securities law and as such may
involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performances or achievements of Acadia to
be materially different from any future results, performances or
achievements expressed or implied by such forward-looking statements.
These forward-looking statements include statements regarding Acadia's
future financial results and its ability to capitalize on potential
investment opportunities. Factors that could cause the Company's
forward-looking statements to differ from its future results include,
but are not limited to, those discussed under the headings "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's most recent annual
report on Form 10-K filed with the SEC on February 19, 2019 ("Form
10-K") and other periodic reports filed with the SEC, including risks
related to: (i) political and economic uncertainty; (ii) the Company's
reliance on revenues derived from major tenants; (iii) the Company's
limited control over joint venture investments; (iv) the Company's
partnership structure; (v) real estate and the geographic concentration
of the Company's properties; (vi) market interest rates; (vii) leverage;
(viii) liability for environmental matters; (ix) the Company's growth
strategy; (x) the Company's status as a REIT; (xi) uninsured losses;
(xii) information technology security threats and (xiii) the loss of key
executives. Copies of the Form 10-K and the other periodic reports
Acadia files with the SEC are available on the Company's website at www.acadiarealty.com.
Any forward-looking statements in this press release speak only as of
the date hereof. Acadia expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in
Acadia's expectations with regard thereto or change in events,
conditions or circumstances on which any such statement is based.

     
ACADIA REALTY TRUST AND SUBSIDIARIES

 

Consolidated Statements of Operations (a)
(dollars
and Common Shares in thousands, except per share data)

 
 

Three Months Ended
March 31,

 

2019

     

2018

Revenues
Rental income $ 74,003 $ 50,779
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